Canadian Securities Exchange-listed GameSquare Esports – which owns Code Red Esports, Gaming Community Network, and minority ownership stakes in League of Legends team Rainbow7 and Crossfire team LGD.REC – announced that it has acquired 100% of the issued and outstanding shares of Frisco, Texas-based Complexity Gaming’s business entity NextGen Tech from its former owners the Jerry Jones Family, Goff Capital, and Jason Lake. The acquisition was an all-stock transaction as part of which the former Complexity Gaming owners received approximately 83.3 million common shares of GameSquare, valuing Complexity Gaming at roughly $33 million CAD ($26.7 million USD) based on a GameSquare share price of $0.40 CAD ($0.32 USD).
The stake of Complexity’s former shareholders in GameSquare is approximately 47% following the acquisition. Additionally, the Jerry Jones Family and Goff Capital agreed to subscribe for an additional $8.5 million CAD ($6.86 million USD) investment in GameSquare at a per share price of $0.40 CAD ($0.32 USD). Further, GameSquare will also become the agency of record for Dallas Cowboys esports and gaming business through a multi-year partnership.
Furthermore, GameSquare announced a bought deal offering as it entered into an agreement with a syndicate of underwriters led by Canaccord Genuity, which agreed to purchase 21.25 million shares of GameSquare at a per share price of $0.40 CAD ($0.32 USD) for gross proceeds of $8.5 million CAD ($6.86 million USD).
GameSquare revealed that it intends to use the net proceeds of the two investments, which are expected to close in July, “to advance the business of GameSquare and for general working capital purposes.”
Following the acquisition, Jason Lake will continue as CEO of Complexity and appointed as GameSquare’s global head of esports. Moreover, Jerry Jones Family-owned Dallas Cowboys’ CEO Thomas Walker and Goff capital President Travis Goff join the board of GameSquare.
According to a statement, Complexity generated $4.2 million CAD ($3.39 million USD) in revenues in 2020 and revenues of $1.7 million CAD ($1.37 million USD) in the first quarter of 2021, which represents a 71% year-over-year growth rate. GameSquare management expects the combined company to generate approximately $28 million CAD ($22.6 million USD) in revenue for the calendar year 2022.
